International Marketing Environment

Economic Political Legal

Product

Price

Place

Promotion

Technological

Socio-cultural

ECONOMIC ENVIRONMENT
1.

Nature of Economic Systems To explain whether business in a country are private or government owned or a combination. Communism A scheme of equalizing the social conditions of life; specifically, a scheme which contemplates the abolition of inequalities in the possession of property, as by distributing all wealth equally to all, or by holding all wealth in common for the equal use and advantage of all. For e.g. China Socialism Economic system which is based on cooperation rather than competition and which utilizes centralized planning and distribution. E.g. Russia

Capitalism
an economic system in which the means of production are privately owned and operated for a private profit; decisions regarding supply, demand, price, distribution, and investments are made by private actors in the free market; profit is sent to owners who invest in businesses, and wages are paid to workers employed by businesses and companies.

GOVERNMENT POLICIES
Fiscal Policy- fiscal policy of a country is related to taxation system of a country. Monetary Policy- It is related with controlling the volume of money, interest rates, Public Expenditure. Commercial Policy- This policy is related to the Objectives, Principles, Rules & regulations concerning industrial development.

STRUCTURAL ANATOMY

Parliamentary System
for the people, by the people and of the people. All the democratic countries have this system.

Absolute System
The ruling regimes dictate government policy without considering citizens needs and opinions. It includes Monarchies & Dictatorship.

MARKETS

Population Population Growth rate: Distribution of Population - Age Wise - Density Market Potential Competitors Customers Income

DEGREE OF URBANISATION
helps in the selection of promotion strategy & product

NON ECONOMIC ENVIRONMENT

1. PHYSICAL ENVIRONMENT
Natural Resources Topography Climate

2. EDUCATION LEVEL

3. CULTURAL
Material culture and technology Aesthetics Language Educational system

4. POLITICAL
Political Unrest- Communal Disputes Attitudes of National towards foreign enterprises & citizens Policies of host government towards the foreign company:
Hostile Friendly

4. POLITICAL
HOST COUNTRY CONTROLS: To ensure desirable behavior by foreign firms and it includes: Entry restrictions - Exchange Control Price control Quotas and Tariffs

Political Risks

CONFISCATION
Government of host country could take ownership of the foreign property without compensation.

EXPROPRIATION
Government of host country could take ownership of the foreign property with some compensation.

Political Risks

NATIONALISATION
When in a country the trade of some products can be done strictly under government control. For e.g. in Burma foreign trade is nationalized means all the export & import related activities are carried under the control of the government.

DOMESTICATION

Foreign companies relinquish control & ownership, either completely or partially to the nationals.

Management of Political Risk

AVOIDANCE: A company can either avoid the political risk by completely avoiding it by not entering the foreign country. INSURANCE: shielding or by taking preventive measures a company can protect itself from the political risk.

5. LEGAL
the rules of the game The legal environment includes: Laws of host country Laws of domestic country